Investor Pressures AT&T Over Media Acquisitions Following Quarter 3 Earnings
Pressure from AT&T activist investor Elliot Management Corporation over the acquisition of Time Warner and DirecTV led to a change at AT&T, according to The Wall Street Journal.
AT&T's third-quarter earnings report was a sign of the challenges the company is facing as it attempts to expand from its traditional telephone business. Compared to the year prior, the earnings report showed a decline in profit and revenue. The companies cellphone business increased its subscriber base, but over 1 million customers cancelled their DirecTV subscriptions.
Elliot Management Corporation has questioned AT&T CEO and Chairman Randall Stephenson's decision to acquire Time Warner and DirecTV and reroute the company into a major player in the media market. “I believe we’re on the threshold of something really remarkable,” Mr. Stephenson said Monday in a conference call with analysts. “I have every intention of being here,” he said.
After the third-quarter earnings report, pressures heightened and AT&T announced its response. The company committed to regular stock buybacks and plans to appoint to new directors to its board. Furthermore, the company will review its portfolio, avoid major acquisitions and pay down its debt from the acquisition of Time Warner in 2018. Lastly, the roles of Chairman and CEO will be separated once Mr. Stephenson retires.
AT&T was facing criticism from activist investor Elliot Management Corporation and in response made some serious moves to the company in the attempt to alleviate the pressure.